Begun in June as peaceful weekend marches, protests that are upsetting Hong Kong’s balance have become more and more frequent and violent, to the point of becoming a daily phenomenon showing no signs of subsiding. Apparently sparked by a controversial extradition bill – which provided for the possibility of extradition and prosecution of Hong Kong citizens to Mainland China – the protests reflect wider concerns about ongoing relations with China and the preservation of Hong Kong’s distinctive political and economic culture. Although the proposed law – already withdrawn, as announced by Governor Carrie Lee in early September – was the original impetus to bring more than one million Hong Kong residents to the streets, protests evolved into a wider expression of discontent with Hong Kong’s Chinese governance. Since the summer of 2014, signs that Beijing is trying to dismantle Hong Kong’s “one country, two systems” model have triggered several growing waves of protest. At stake is not only the relative political freedom Hong Kong has enjoyed since Britain returned the territory to China in 1997, but also its economic future as it faces growing competition from other global financial hubs.<\/p>\n
Since the 1997 handover of Hong Kong back to China, all major protests in the region have been driven by concern over China’s influence in the area. For example, hundreds of thousands of protesters in 2003 marched against a proposed national security law which would have made it more difficult to express anti-China views (the law was postponed indefinitely). Large-scale protests broke out again in 2012, when thousands of people opposed to the introduction of a pro-China national school programme in public schools, leading to the withdrawal of the proposal. This was followed by the Occupy Central protests in 2014, often referred to as the Umbrella Revolution, which lasted for almost three months.
\nThe causes of discontent
\nWhile the questioning of the rule of law immediately appeared to be one of the root causes of popular discontent, more recently socio-economic issues have emerged as another factor of dissatisfaction, especially among the younger generations.
\nPeople are angry about Hong Kong’s high economic inequality, including growing obstacles to social mobility, extreme competition in the workplace and exorbitant housing prices, which contribute to an increasingly pessimistic view of the future. In particular, young people perceive a clear gap between their standard of living and that of their parents’ generation. The inequality in Hong Kong is a fact. Hong Kong’s Gini coefficient is above 0.5, marking it as one of the most unequal societies in the developed world.
\nAmong the most serious problems caused by this inequality are, for example, delayed access to health care for the underprivileged classes, but also poor career opportunities for the younger generations (a study recently found that the average monthly salary for graduates today is lower than in 1987). This inequality is even more evident when looking at the real estate situation. Property prices in Hong Kong have reached dizzying levels, making it impossible not only to buy a house, but also to get a mortgage or simply make a living on rent.<\/p>\n
The fact is that the world has changed dramatically since the baby boomers managed to build a fortune through “blood, toil, tears and sweat”. In today’s economy the balance has changed significantly, the gap has widened and risks leaving behind all those who do not have enough capital to access the best schools and be financially supported as they develop their careers.<\/p>\n
Hong Kong’s economy grew rapidly during the latter part of the 20th century, accounting for more than 18% of China’s GDP in 1997. With China’s rapid economic growth over the past two decades, however, Hong Kong’s economic strength has diminished, making it now roughly similar in economic terms to neighbouring Shenzhen or Guangzhou. Undoubtedly, Hong Kong still serves as a privileged channel for Chinese business because of its relatively strong rule of law and solid capital markets, but there is a real risk that its uniqueness may diminish. Initiatives such as the Greater Bay Area, unveiled by China earlier this year to connect Hong Kong, Macao and nearby Chinese cities in an economic ecosystem that surpasses Silicon Valley, will continue to bring Hong Kong closer to China.
\nChinese interference is certainly on the protesters’ minds. When Hong Kong was returned to mainland China, 50 years of autonomy was promised through the “one country, two systems” model that formally ends in 2047. The year 2047 has always loomed in Hong Kong’s future, with many deep hopes that at that point China would grow to resemble Hong Kong in terms of social and political freedoms. At this juncture, however, that future seems unlikely.<\/p>\n
Most consumer-oriented sectors such as travel, tourism, hotels, retail and restaurants have been significantly affected by the collapse of tourists and the reduction in local consumption. It is mainly retail and tourism that have been hit hardest. Cathay Pacific Airways and other airlines have already cancelled hundreds of flights, while global brands from Walt Disney to Prada, Richemont to Swatch Group are suffering the effects of \u201cfrozen\u201d tourism industry.
\nInterContinental Hotels Group has also reported a significant drop in bookings since the protests began. The world’s most expensive real estate market has remained relatively stable, although analysts say the outlook is dimming. Properties at a residential site near the former airport, Kai Tak, were sold at the lowest prices in the last two years. CK Asset Holdings, the developer founded by billionaire Li Ka-shing, has postponed a significant, long-planned sale of luxury condominiums. The Hong Kong stock market initially remained stable, but then plunged violently. Some economists believe that a recession is possible if protests continue, although the Hong Kong government has promised to take measures to support the economy. More than $600 billion of stock market value has been erased since early July and analysts are concerned about the collapse in real estate values.
\nGross Domestic Product grew only 0.6 percent in the second quarter and continued unrest could increase the possibility of a recession, according to Bloomberg Economics.
\nA significant number of companies have decided to postpone or change their listing plans due to recent protests. For example, Alibaba has postponed its offer until the political climate has stabilized. Fitch Ratings, the credit rating agency, has slightly downgraded Hong Kong based on recent events and the prospect that “Hong Kong’s continued integration into China’s national governance system will present greater institutional and regulatory challenges over time\u201d. Although the impact of this downgrade is more symbolic than financial, it casts another shadow over the long-term viability of Hong Kong’s unique status as a financial hub. In addition to operational, strategic and financial disruptions, one of the unintended consequences of the protests is the impact they can have on companies in attracting and retaining talent. If the underlying causes of the protests are not addressed, it will become increasingly difficult to do business and many people will simply choose to leave Hong Kong. As a result, it may prove difficult for companies to sustain the human capital needs they require in Hong Kong, which may further reduce Hong Kong’s attractiveness as a hub for international business, perhaps opening the door to another Asian city that may emerge as a global economic centre.<\/p>\n","protected":false},"excerpt":{"rendered":"
Iniziate a giugno come marce pacifiche del fine settimana, le proteste che stanno sconvolgendo l\u2019equilibrio di Hong Kong sono via via diventate pi\u00f9 frequenti e violente, fino a diventare un fenomeno quotidiano che non accenna a placarsi.<\/p>\n","protected":false},"author":95,"featured_media":6744,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[607],"tags":[],"class_list":{"0":"post-8037","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-magazine-eng"},"acf":[],"yoast_head":"\n